Brown v. General Trading Co.

• Decision Date: 19 November 1941
• Parties: CHARLES D. BROWN, receiver, v. GENERAL TRADING COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

310 Mass. 263

37 N.E.2d 987

CHARLES D. BROWN, receiver, v. GENERAL TRADING COMPANY.

Supreme Judicial Court of Massachusetts, Suffolk.

November 19, 1941

October 6, 1941.

Present: FIELD, C.

J., DONAHUE, QUA COX, & RONAN, JJ.

Mortgage, Of real estate: assignment, foreclosure. Landlord and Tenant Existence of relation, Termination of relation. Conversion.

After a mortgagee of real estate had assigned the mortgage to a creditor as security together with his rights in proceedings which he had begun for its foreclosure, he had no further right in his own behalf to complete the foreclosure by sale or to enter to foreclose: and a lease given by him after purchasing at a foreclosure sale so completed was of no effect as against a tenant at will of the mortgagor.

A tenant of a mortgagor of real estate properly was found not to have become a tenant of the mortgagee upon a purchase by the mortgagee at a void foreclosure sale merely because, at the mortgagor's request, he had paid rent to the mortgagee and the tenancy under the mortgagor continued.

One, unlawfully taking possession of land and of the chattels of a tenant thereon, thereby became liable to the tenant for damages resulting from interference with a business conducted by him on the land and for conversion of the chattels.

CONTRACT OR TORT. Writ in the Superior Court dated March 11, 1936. The case was heard by Morton, J., without a jury.

W. J. Good, (C.

D. Brown with him,) for the plaintiff.

J. F. Cavanagh, for the defendant.

RONAN, J. The Publix Stations, Inc., hereinafter called the plaintiff although Brown is now receiver of its property and was permitted to prosecute this action, became a tenant at will of the trustees of the Park Square Real Estate Trust hereinafter called the trust, of certain premises on Stuart Street in Boston in April, 1934, which it thereafter used for a parking lot for automobiles and for the sale of automobile accessories until December 4, 1935, when possession of the said premises was taken by the defendant, purporting to act under a lease given to it by the New York, New Haven and Hartford Railroad Company, hereinafter called the railroad. The plaintiff brought this action in tort to recover damages for the conversion of its property, for its wrongful detention, and for eviction from the premises by the defendant. The case was heard in the Superior Court upon the report of an auditor, evidence upon the question of damages, and a decree of the District Court of the United States for the District of Connecticut dated August 14, 1936, authorizing the Reconstruction Finance Corporation, hereinafter called the R. F. C., to foreclose a mortgage given by the trust to the railroad on January 2, 1917, and assigned by the railroad to the R. F. C. on November 23, 1934. The judge found for the defendant. The case is here upon the exceptions taken by the plaintiff to the refusal of the judge to grant certain requests for rulings.

The principal issue to be decided in this case is which party was entitled to possession of the premises on December 4, 1935, when the defendant entered and took possession; and that, in turn, depends on the right of the railroad to foreclose on September 3, 1935, the mortgage given to it by the trust.

The facts relative to title are not in dispute and may be briefly summarized. The railroad on January 2, 1917, sold certain premises, including the locus in question, to the trust which, on the same date, gave back to the railroad a mortgage containing the regular statutory power of sale in case of default. The railroad on December 19, 1933, by publication began a proceeding to foreclose the mortgage, in accordance with the power of sale therein contained, by a public sale which was to be held on January 10, 1934, but which was continued from time to time. The railroad assigned this mortgage to the R. F. C. on November 23, 1934, together with all its right, title and interest to the proceeding instituted by it by publication made on December 19, 1933, under the provisions of G. L. (Ter. Ed.) c. 244, Sections 14 and 15, and appointed the R. F. C. its attorney to complete such proceeding in its own name or in the name of the railroad, or to compromise or terminate said proceeding, or to complete the sale under the power of sale, or to take such other steps as it might deem necessary.

After this assignment the sale originally set for January 10, 1934, was continued by the railroad from time to time until September 3, 1935, when the premises were bid in by the railroad. The railroad in its own behalf on September 3, 1935, made an entry upon the premises for the purpose of foreclosing this mortgage. A new mortgage was given by the railroad to the R. F. C. as partial security for an indebtedness owed to the latter by the former "and in lieu of three (3) instruments of assignment to said Reconstruction Finance Corporation of the mortgages and notes of the Trustees of the Park Square Real Estate Trust, dated November 23, 1934." The railroad gave a lease of the premises to the defendant to take effect on November 19, 1935. The railroad on November 12 gave the plaintiff a written notice to quit and deliver up the premises within seven days. A second notice to deliver up the premises on December 3, 1935, was given to the plaintiff on November 22, 1935. The plaintiff continued in possession until the early morning of December 4, 1935, when the defendant took over possession.

On petition filed by the R. F. C. in the District Court of the United States for the District of Connecticut, where reorganization proceedings were pending against the railroad, to rescind the attempted foreclosure on September 3, 1935, of the mortgage from the trust dated January 2, 1917, and to allow the R. F. C. to foreclose the said mortgage on its own account, the latter was authorized to foreclose this mortgage.

It has long been settled in this Commonwealth, that the railroad took the legal title to the land described in the mortgage, and the R F. C. as its assignee took a similar title. Gould v. Newman, 6 Mass. 239 . Hills v. Eliot, 12 Mass. 26 . Barnes v. Boardman, 149 Mass. 106 . Mulcahy v. Fenwick, 161 Mass. 164 . Nathan Miller & Sons, Ltd. v. Blinn, 219 Mass. 266 . Harlow Realty Co. v. Cotter, 284 Mass. 68 . Kaufman v. Federal National Bank of Boston, 287 Mass. 97 . The fact that the assignment was given as collateral security for an indebtedness did not limit the ordinary effect of the assignment as against one lawfully in possession of the land, nor enable the assignor, acting in its own behalf, to make an effectual entry upon the land or a valid exercise of the power of sale. Brown v. Tyler, 8 Gray, 135. Stevens v. Dedham Institution for Savings, 129 Mass. 547 . Holmes v. Turner's Falls Co. 150 Mass. 535 . MacFarlane v. Thompson, 241 Mass. 486 . Lamson & Co. (Inc.) v. Abrams, 305 Mass. 238 . Although the railroad began foreclosure proceedings by publication in December, 1933, it did not enter and take possession of the premises until October 2, 1934. But by an instrument dated October 24, 1934, and recorded on October 27, 1934, the railroad waived the possession so taken. The entry made at the time of the foreclosure sale of September 3, 1935, and the sale to the railroad did not affect the plaintiff's tenancy. At that time, the legal and record title to the mortgage was in the R. F. C. The entry and sale were made by the railroad acting entirely...